The saying goes “there is more than one way to skin a cat.” The same is true when it comes to managing corporate earnings. Yahoo demonstrated that Tuesday. Despite revenue plunging 13%, the company managed to eke out positive earnings growth near 8% thanks to aggressive cost cutting.

Overall, for the second quarter Yahoo reported net income of $141m, or 10 cents a share, up from $131m or 9 cents a share for the same period a year ago. Revenue came in at $1.573b. Revenue less traffic acquisition costs was $1.14b.

Analyst consensus expectations were for net income of 8 cents a share on revenue (less TAC) of $1.14b. Yahoo’s result was just good enough to beat it.

CEO Carol Bartz said she was pleased with the result “considering the economy.”

“Overall, we’re seeing less fear in the market place, and advertisers are planning their spending more actively than they did earlier this year,” Bartz said during the conference call.

Moving forward, Yahoo plans to spend as much as $75m in the third quarter to improve its technology and ad platform, and expand marketing.

“We’ve drained all the right buckets and now we’re’ filling back up,” CFO Tim Morse said.

In the second quarter, Yahoo’s page views were up about 7% but search revenue fell 15% despite an increase in searches. Rumors continue to swirl that a search deal could be in the works with Microsoft.

Looking to the third quarter, Yahoo is forecasting revenue in the range of $1.45 to $1.55b.

More of the detail, by the numbers:

REVENUE
• Q2 GAAP revenues were $1.573 billion, down 13% from $1.798billion year over year (Y/Y). The international segment contributed $420.5m to the total.

REVENUE BREAKDOWN
• Marketing services revenues were down 13% for the second quarter while fee revenues fell 8%.

Owned and Operated -
•Owned and Operated sites generated $858.2 million in marketing services revenue for the second quarter, down 16% from $1,016 million for the same period Y/Y.
•At Owned and Operated sites, search revenue in Q2 was down 15%. Display advertising revenue was down 14%.
Affiliates -
• Affiliate sites generated $519.7 million in revenue for Q2, down 9 percent from $571.3 million for the same period last year.

Fee Revenue-
• Fees revenues were $195 million for Q2, down $211.1 million Y/Y.

CASH FLOW
• Operating cash flow from worldwide operating activities for Q2 was $385.4 million, down from $427 million Y/Y.
• Free cash flow for Q2 was $266 million, up compared to $231 million for the same period of last year.

REGIONAL SEGMENTATION
• United States GAAP revenues in Q2 were $1,152.4 down compared to $1,262.1 Y/Y.
• International GAAP revenues in Q2 were $420.5, down from $535.9 for the same period last year.